India has a lot to worry about as war clouds darken in the Middle East

The possibility of Israel’s Gaza war spiralling into a much broader conflict in the region is causing serious concern to India and other countries.

External affairs minister S Jaishankar said recently that India is "very much" concerned at the possibility of the broadening of the conflict in the Middle East. Prime Minister Narendra Modi pointed out that the region is one of the main energy sources of India.

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Besides, if the conflict spreads, India would have to rescue millions of Indians from the region to safety. This in itself would be a big challenge. The ill-timed attack by Hamas on Israel that killed 1,200 people and allowed it to take 254 hostages on October 7 last year led to a massive retaliation by Israel. More than 42,000 Palestinians, half of them women and children, have died and Gaza has been pulverised by Israel.

War engulfs Lebanon

The war has spread to Lebanon and threatens to reach other countries in the region and draw Iran into the conflict, Israel’s main rival. The Israeli army has killed Hassan Nasrallah, the chief of Hezbollah, a deadly militia organisation and the top echelon of its leadership. There is growing worry that Israel might now be tempted to attack Iran and draw it into a war, sparking off a regional conflict.

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Both are nuclear powers. Observers fear that if they go to war, it could deteriorate into a nuclear conflagration. Iran’s Supreme leader, Ayatollah Ali Khamenei, has said Tehran would never use nuclear weapons. But under the rising tension such assurances have failed to comfort people.

Why is India concerned?

For India, West Asia is strategically very important. Apart from being one of its main sources of energy, the trade and investment between India and the Gulf have increased substantially in recent years. Over nine million Indians live and work there. A large number of Indian Muslims visit the region for Hajj and pilgrimage.

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In the fiscal year ending in March 2024, India imported 232.5 million tonnes of crude oil and 30.91 billion cubic meters of gas from the region.

India’s energy needs

India’s net oil and gas import bill for the year was USD 121.6 billion. Bilateral trade between the two sides is over USD 161.82 billion, which is more than 14 per cent of India’s total trade.

“It can adversely impact India’s crucial interests like energy supplies, economic projects and the expats, whose numbers are over 9.5 million,” says former Indian diplomat Anil Trigunayat.

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Trigunayat, a Distinguished Fellow at the New Delhi think-tank Vivekananda International Foundation, says that Indian connectivity projects like INSTC (International North South Transport Corridor) that links India to Europe (through Russia, Iran, Central Asia, Azerbaijan to Europe) or IMEEC (India-Middle East-Europe Economic Corridor) can also be adversely impacted in a direct Iran-Israel conflict).

Attacks on sea

India depends on the Gulf countries for 55 to 60 per cent of its energy though its dependence on Iranian oil and gas has significantly gone down.

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Indians working in the region also send back a substantial amount of remittances. The USD 40 billion remittance helps in taking care of a substantial part of the country’s oil bill.

“The insurance coverage on the supplies passing through the region went up in the wake of attacks by Houthis on ships passing through the narrow sea lanes,” says Talmiz Ahmed, a former Indian diplomat widely considered a leading expert of the region.

Walking the diplomatic tightrope

Most ships and vessels are now going through the longer route of the Cape of Good Hope around the bottom tip of Africa due to the region’s instability.

“If the conflict escalates and Israel and Iran enter into the war, then the situation will deteriorate further and supply lines in West Asia will be affected more,” Ahmed added.

Israel and Iran are both India’s strategic partners. This has put New Delhi in a dilemma. India has walked the tightrope to maintain good ties with both countries. A deterioration in the situation would be a diplomatic challenge for New Delhi.

Ties with Iran, Israel

India entered into a 10-year agreement in May this year with Iran for operating the Shahid Beheshti port at Chabahar to give it access to Afghanistan, bypassing Pakistan and enhancing Delhi’s connectivity with the Central Asian countries.

On the other hand, Israel is one of the most important partners of India. The two countries cooperate in many areas including joint production of weapons and on security and intelligence-sharing as well as agriculture and trade and investment.

The strong Jewish lobby in the United States has also helped in creating a favourable opinion among American lawmakers about Indian concerns and interests.

As the horrific Gaza war enters the second year, it has given experts the opportunity to assess how the situation played out for the two main adversaries --Israel and Iran.

Most observers acknowledge that the attack on Israel by Hamas was ill-timed and carried out without Iran’s prior knowledge or approval.

Iran was not prepared to go for any direct confrontation with Israel at this juncture. Nor was Hezbollah, its closest ally in the region that is widely considered as Iran’s first line of defence.

Hezbollah was reluctant for a fight because Lebanon’s economy was going through a prolonged crisis and a fresh conflict would have worsened it.

Iran wanted to maintain strategic patience where it took a number of hits from Israel in the past years that preceded even the October 7 attacks, because it wanted to avoid a regional war, experts say.

The ongoing economic crisis in Iran because of prolonged American sanctions had challenged the Islamic regime’s legitimacy which was often tested by people, especially the post-revolution and younger generations.

Hezbollah’s decimation

Tehran’s top priority was to engage with the US and get the sanctions lifted so that the confidence in the regime by Iranian people could be restored.

It knew that a confrontation with Israel would thwart any chances of engagement with the US and drag the Americans into a regional conflict that it desperately wanted to avoid.

But the decimation of Hezbollah has now left it with very few choices and a growing fear that it could soon be attacked. This would force it to break the strategic restraint and get into a full-fledged armed confrontation with Israel.

Israel is on top

The biggest beneficiaries of the growing tension have been Israel and its Prime Minister Benyamin Netanyahu. When the Gaza war began, his stocks were low and he was under tremendous pressure from Israelis to get the hostages freed.

During his recent visit to the US, Netanyahu read the situation correctly and knew that his opportunity to act was now since the Democrat leadership was in disarray and most others were busy with the presidential election.

He realised that after the election, irrespective of a Donald Trump or Kamala Harris victory, he will be forced to stop the war and sign a deal.

Netanyahu’s popularity rating rises

He took full advantage of Iran’s strategic restraint to subdue its allies in the region and put Tehran on the backfoot as the Iranian leadership was ready for several losses to avoid a regional conflict. His popularity rating in Israel has now risen significantly.

One major factor in his success has been the support US President Joe Biden provided despite publicly calling for a ceasefire while he continued to arm Israel and supported it diplomatically, politically, and with money and intelligence.

However, any further action by Israel and Iran against each other could lead to a regional conflict that has created serious concerns in India and elsewhere.

No expert is willing to hazard a guess on how the situation in the tension-filled volatile region might turn.